2016 (7) TMI 178 - AT - Income Tax

TDS u/s 194J - non deduction of tds - recovery of dues - Held that - It is not clear from the records as to what is the component of the professional charges paid beyond ₹ 20,000/- so as to determine the liability to TDS u/s 194J of the Act. In these circumstances, we deem it fit to grant early hearing of these appeals on 05.09.2016 and till such time, the revenue is directed not to take coercive measures for recovery of the dues from the assessee in this regard. Both the parties are informed in the open Bench regarding the date of hearing and no fresh notice would follow for the same. Hence the Stay Applications of the assessee for all the assessment years are disposed of as directed above.

Summary

Issues:
Stay of demands for assessment years 2006-07, 2007-08, and 2008-09 due to non-deduction of tax at source by the assessee on payments made to hospitals/nursing homes under cash-less scheme.

Analysis:
The assessee, a Third Party Administrator for Public Sector Insurance Companies, sought to keep demands of ?77,27,520/-, ?72,22,589/-, and ?78,30,693/- for A.Yrs. 2006-07, 2007-08, and 2008-08 respectively in abeyance through Stay Petitions. The ld. AO found non-deduction of tax at source on payments made to hospitals/nursing homes under the cash-less scheme, invoking section 194J of the Act. The assessee had earlier preferred a writ before the Calcutta High Court, leading to directions for cooperation with the Income Tax Authorities. The ld. CIT(A) directed the AO to bifurcate payments into professional services and others, applying TDS provisions only if professional fees exceeded ?20,000. The assessee submitted details and certificates, citing the Hindustan Coca Cola Beverages Pvt. Ltd. case. The AO raised demands, leading to appeals and subsequent orders. The assessee argued against TDS obligation due to being an agent of insurance companies and lack of clarity for A.Yrs. under dispute. The AR highlighted non-compliance by the AO with earlier directions and the exparte order by the CIT(A), emphasizing the impossibility of producing records beyond six months.

The DR objected to absolute stay, suggesting payment for undisputed portions and installment options. The AR argued the availability of payment details and the AO's directive to verify from hospital records due to the assessee's inability to produce them. The Tribunal acknowledged the AR's arguments but noted the lack of clarity on professional charges exceeding ?20,000. Consequently, early hearing was granted, and coercive measures for recovery were prohibited until the hearing on 05.09.2016. The Stay Applications were disposed of accordingly.

In conclusion, the Tribunal granted a stay on demands pending clarification on professional charges exceeding ?20,000 and directed an early hearing, prohibiting coercive recovery measures until then. The decision balanced the assessee's challenges in producing records with the need for clarity on TDS obligations, ensuring a fair resolution of the dispute.